“...I think people predicted NAFTA would result in a lot of jobs going to Mexico and some certainly did but why did so many go to China?...
Good question. I don’t know.
Labor so cheap that even with tariffs companies still profit perhaps? I’m assuming there are tariffs on goods imported from there.”
This has bothered me for some time. Why would stuff be so cheap from Chine unless there is a fix in somewhere. The shipping costs should — one would expect — would add to the cost. I’ve often wondered why the greenies haven’t pointed out the energy costs in shipping boatloads of cheap consumer goods which are generally of poor quality and soon discarded and replaced. Why is every pair of shoes, jeans, pliers, pots and pans manufactured in China and shipped 2,000 miles? How can they possibly believe that the whole of the US would be sitting at desk jobs counting stuff and as a nation — or even georgraphic region — not produce anything and pay our bills?
Shipping costs have come down and labor there is peanuts.
Problem with shipping all these jobs overseas or to Mexico — there’s no middle class left in the United States to buy anything. I guess Americans can head south of the border since they believe in being friendly to immigrants.. or is that just their immigrants??
“Why would stuff be so cheap from Chine unless there is a fix in somewhere.”
The cost to do business here in the US is astronomical. There is little legal costs in China I would assume, no EPA suing you for everything, no red tape from OSHA, you can fire people when you get slow, without having to pay them unemployment, you can fire people for being inept without being sued over it, you don’t need to have handicap access to everything, you don’t have to hire muzlims who won’t handle meat to be your butcher, you don’t have to hire muzzlems who won’t handle liquor at your liquor store, etc. You don’t have to worry about union shakedowns, union laws, political shakedowns. In a nutshell, I’ve heard China is more like the capitalism of our 1950’s.
The yearly pay we give our few employees (we are a small shop, myself, wife, a plumber, another service tech, and a tin horn and his helper) amounts to about half their real cost to employ when all is said and done, with benefits and goobermint involvement. Our overhead is staggering, because of liability, and we have been sued a half-dozen times over the last 6 years, not for work, but dumb-assery. We were sued 4 years ago for inadequate handicap access to our property (we settled), we have had 4 minor traffic accidents, that resulted in claims of serious injury (minor fender benders), and we were sued once for discriminatory hiring practice, which we are working currently resolving. All of this adds up to a very unfriendly, and unprofitable business climate.
On the financial side, I can’t begin to talk about those costs, our accountants and tax laws (which are now going to get much worse), a legal team on retention, advertising, gas (a HUGE cost to us), insurance, etc.
On the goobermint side, liability, workers comp, unemployment, licensing in every municipality we deal with for each of our employees (annually), taxes, ‘contributions’ to every politician that sits on a high horse in these municipalities, not to mention how many $50 dollar bills we lose during inspections from crooked building inspectors, who can make your life really difficult, forcing you to tear down a whole system and start over, for some inane code... or, you can drop a fifty somewhere where he can find it, and get signed off in an afternoon. Or forgetting to drop a fifty, and having your next install inspection stalled for a week or so because the inspector doesn’t quite like you as much anymore.
And if that sounds like a croc, try doing business in convention centers. We used to do the sheet metal fab for them, and it’ll cost you a couple hundred just to have a union electrician plug in an extension cord (cash of course).
Then, we add in our sponsorships, little league, hockey league, girls soccer, 2 ads in 2 churches, VFW, American Legion, Masonic Blue Lodge, Shriners, Kiwanis, Eagles Club, Elk and Moose, Chamber of Commerce, BBB, as I’m sitting here writing this, more and more costs just keep coming into my head, and it is getting me depressed. Of course the above mentioned are discretionary, and many of them are going to have to be cut this year or the next, we just can’t afford them anymore.
On top of all that, my guys have to be enrolled in continuing education, as mandated by my state licensing for their respective fields, plumbing, electrical, and our NATE and RSES certifications. We eat those costs as a employer, though we could ask our guys to pay that, but we don’t. So, we have on top of all the above, continuing education in our colleges, which is a few thousand each year per employee, and a few thousand each year for our guys to get manufacturers education, for seminars from TRANE, Carrier, etc, for all their new products (There are several they go to each year, those are just 2 that were the most recent).
China just doesn’t have these costs.
My wife read my post, and said I forgot our number 1 cost, Healthcare. Our healthcare costs are enormous, even with the moderate plan we offer our guys. We expect this to increase after the 1st of the year as well.